Patent Case Summaries January 24, 2024

Patent Case Summaries | Week Ending January 19, 2024

CyWee Group Ltd. v. ZTE (USA), Inc., et al., No. 2021-1855 (Fed. Cir. (PTAB) Jan. 18, 2024). Opinion by Prost, joined by Hughes and Stoll.

ZTE filed an IPR petition challenging certain claims in a patent owned by CyWee. Later, LG Electronics filed an IPR petition and moved to join ZTE’s ongoing IPR. LG premised its motion for joinder on several limitations, including that it would “act as a passive ‘understudy’ and would not assume an active role unless ZTE ceases to participate in the instituted IPR.” The Patent Trial and Appeal Board granted LG’s motion. While that motion was pending, CyWee moved to amend the claims, which ZTE opposed.

After LG’s joinder, CyWee filed a revised motion to amend. ZTE stated that it did not oppose the revised motion, prompting LG to seek leave to oppose the motion on the ground that ZTE was no longer participating. The Board agreed and thus allowed LG to oppose the motion and present arguments and evidence independently from ZTE.

The Board issued a final written decision finding that the challenged original claims are unpatentable as obvious and denying the revised motion to amend. CyWee sought Director review, which was rejected. CyWee then appealed, challenging the Board’s denial of the revised motion to amend.

In the appeal, CyWee made three arguments, but the Federal Circuit rejected all three and thus affirmed the Board’s determinations.

First, CyWee argued that the Board erred by allowing LG to oppose the revised motion to amend, and by allowing LG to assert a prior art reference not raised by ZTE (Withanawasam). The Federal Circuit saw no error in the Board’s approach. Because ZTE did not oppose CyWee’s revised amended claims, the Board reasonably allowed LG to do so. LG’s understudy status was “only insofar as ZTE remained active in the IPR,” and ZTE had withdrawn its objections. The Federal Circuit also concluded that CyWee “identified nothing in the Board’s current procedures prohibiting LG from raising Withanawasam in opposition to the revised motion to amend.”

Second, CyWee argued that the Board erred by denying the revised motion to amend. Specifically, CyWee argued that the Board erred in finding a motivation to combine the prior art that formed the basis for LG’s opposition to the proposed amended claims. The Federal Circuit disagreed because the Board “credited the testimony of LG’s expert” on this issue, “which is substantial evidence that supports the Board’s motivation-to-combine conclusion.”

Lastly, CyWee argued that the PTO did not have an appointed Director at the time CyWee sought Director review and the lack of opportunity for meaningful Director review mandated dismissal of the IPR. The Federal Circuit explained that it had already “considered and rejected these arguments” in several earlier cases, and the court “reject[ed] them again here.”

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Roku, Inc. v. ITC, et al., No. 2022-1386 (Fed. Cir. (ITC) Jan. 19, 2024). Opinion by Hughes, joined by Dyk and Stoll.

Universal Electronics, Inc. filed a complaint with the ITC asserting that certain Roku products infringe a UEI patent that resolves incompatibilities among electronic devices such as smart TVs and DVD or Blu-ray players. UEI’s technologies are called “QuickSet,” which is incorporated into many smart TVs. UEI relied on QuickSet to satisfy the economic prong of the domestic industry requirement.

The administrative law judge found that Roku violated Section 337 by importing infringing articles, and the Commission affirmed. The Commission found that in a 2012 agreement, an inventor, Mr. Barnett, had assigned all his rights in the application that became UEI’s patent. Next, the Commission found that UEI satisfied the economic prong by proving a substantial investment in engineering and R&D to exploit the patent via the QuickSet platform. The Commission also found that Roku had not shown the asserted claims to be obvious, and that UEI had presented compelling evidence of secondary indicia of nonobviousness. Roku appealed, challenging all three findings.

The Federal Circuit affirmed. First, the court agreed with the Commission that the 2012 agreement constituted a present conveyance of Mr. Barnett’s rights in the patent. The language in the agreement stated that Mr. Barnett “hereby sell[s] and assign[s] … [his] entire right, title, and interest in and to the invention,” including “all divisions and continuations thereof, including the subject-matter of any and all claims which may be obtained in every such patent.”

Next, the Federal Circuit upheld the Commission’s findings relating to a domestic industry. Roku’s argument focused on UEI’s investments in smart TVs rather than the QuickSet technology installed on those TVs, but the Federal Circuit ruled “that is not the appropriate inquiry.” “Our precedent does not require expenditures in whole products themselves, but rather, sufficiently substantial investment in the exploitation of the intellectual property.” The court continued: “In other words, a complainant can satisfy the economic prong of the domestic industry requirement based on expenditures related to a subset of a product, if the patent(s) at issue only involve that subset.” Here, there was no dispute that QuickSet, a subset of the entire TV, practiced the patent.

Lastly, the Federal Circuit affirmed the finding of nonobviousness. On appeal, “Roku [did] not challenge the Commission’s actual findings” regarding the teachings of the prior art. As for UEI’s evidence of secondary indicia of nonobviousness, Roku argued only that the Commission erred in finding a nexus. The Federal Circuit declared that argument “meritless.” Roku did not dispute that QuickSet was discussed in the evidence the Commission relied on.

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